The government dominates Libya’s socialist-oriented economy through complete control of the country’s oil resources, which account for approximately 97% of export earnings, 75% of government receipts, and 54% of the gross domestic product. Oil revenues constitute the principal source of foreign exchange. Much of the country’s income has been lost to waste, corruption, conventional armaments purchases, and attempts to develop weapons of mass destruction, as well as to large donations made to developing countries in attempts to increase Qadhafi’s influence in Africa and elsewhere. Although oil revenues and a small population give Libya one of the highest per capita GDPs in Africa, the government’s mismanagement of the economy has led to high inflation and increased import prices. These factors resulted in a decline in the standard of living from the late 1990s through 2003.

Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange constrain growth. Import restrictions and inefficient resource allocations have caused periodic shortages of basic goods and foodstuffs.

Although agriculture is the second-largest sector in the economy, Libya imports most foods. Climatic conditions and poor soils severely limit output, while higher incomes and a growing population have caused food consumption to rise. Domestic food production meets about 25% of demand.

On September 20, 2004, President George W. Bush signed an Executive Order ending economic sanctions imposed under the authority of the International Emergency Economic Powers Act (IEEPA). U.S. persons are no longer prohibited from working in Libya, and many American companies in diverse sectors are actively seeking investment opportunities in Libya. The government has announced ambitious plans to increase foreign investment in the oil and gas sectors to significantly boost production capacity from 1.2 million barrels per day (bpd) to 3 million bpd by 2012. The government is also pursuing a number of large-scale infrastructure development projects such as highways, railways, air and seaports, telecommunications, water works, public housing, health care, and hotels.

Real GDP (2000$, 2006): $92.010 billion.
GDP per capita (PPP, 2008 est.): $14,800.
Real GDP growth rate (2008 est.): 7.3%.
Natural resources: Petroleum, natural gas, gypsum.
Agriculture: Products--wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans; cattle; approximately 75% of Libya's food is imported.
Industry: Types--petroleum, food processing, textiles, handicrafts, cement.
Trade: Exports (2006 est.)--$37.02 billion f.o.b.: crude oil, refined petroleum products. Major markets (2005)--Italy (38%), Germany (15.1%), Spain (9.3%), Turkey (6.2%), France (6.2%), U.S. (5.2%). Imports (2006 est.)--$14.47 billion f.o.b.: machinery, transport equipment, food, manufactured goods. Major suppliers (2003)--Italy (21.2%), Germany (10.2%), Tunisia (5.9%), Turkey (4.8%), U.K. (4.8%), France (4.7%), South Korea (4.6%), China (4.5%).